Friend.Tech users earn $12 million in fees

Web3-social network Friend.Tech continues to grow — users and influencers collectively earned more than $12 million in fees. This is evidenced by the Dune dashboard from TK Research.

In total, Friend.Tech has 220,000 unique traders registered, with a total trading volume of $240 million.

Each user in the app has their own channel, access to which is granted after purchasing “keys” (formerly called “shares”). When these are bought or sold, a 5% fee goes to the platform and another 5% to the channel owner.

Pricing of the “keys” follows the yield curve — that is, the more assets are bought and circulating, the higher their price, and vice versa.

According to on-chain data, earnings of some influencers on Friend.Tech exceed $50,000. The most active member of the community earned more than $341,000 in fees.

Since its launch on August 10, the social graph has seen its third surge in activity. Still, the app has not yet surpassed the peak of about 85,700 daily transactions observed during the second wave of hype.

At the end of August, some users noted the ‘death’ of the project, as activity fell by almost 90%.

Weeks later, the total value locked in the protocol jumped several-fold—to $13 million. At the time of writing, the metric stands at $35.8 million, according to DeFi Llama.

The project continues to gain momentum and demonstrates strong results even in beta with an invite-only system. But some market participants remain unconvinced about its long-term prospects.

«The yield curve is definitely a bit rough, and it would be better if the developers could choose a specific formula for their audience. The fees are truly insane as well. I don’t think the platform expected such volumes”, — noted the influencer and NFT-collector under the nickname Dingaling, whose channel ranks 13th among Friend.Tech’s top channels.

He added that the network’s future success depends on structuring the forthcoming tokenomics and the likely airdrop. The distribution of coins has not yet been officially confirmed. Some speculate that the bonus points issued for trading will eventually be converted into tokens.

«[Friend.Tech] should remain successful until the first airdrop and the launch of the coin. I’m not sure what comes next, as I really don’t see the point of paying $10,000 as an entry fee into someone’s secret chat”, added Dingaling.

Founder of DeFiance Capital Arthur Cheong, who ranks 18th in the social network’s top, spoke about the platform’s social token concept. In his view, the developers are leveraging established mechanisms and refining them, and the yield curve provides natural liquidity for all ‘keys’.

However, he stressed that the Friend.Tech team must maintain the app’s momentum and sustain user retention. Additionally, the platform should address certain shortcomings — for example, farming its own ‘keys’.

Web3 developer going by the handle 0xngmi criticized the app’s security system. First, he highlighted the risks of frontend hacks and data leaks.

brief review of friendtech’s security model:
— if friendtech frontend is hacked they can steal funds (just direct iframe to send the ETH)
— if privy iframe is hacked they can steal funds (it holds key)
— if privy dies/loses data, you lose your money, since they keep 2/3 shards pic.twitter.com/h0VLbaYihZ

— 0xngmi (@0xngmi) September 20, 2023

Second, the programmer pointed out that the protocol stores private keys in the privacy frame. If it is compromised, user funds will inevitably be lost.

«This means that a hack, similar to the attack on Balancer, would be devastating; simply opening the app would drain your wallet, and you would not have to do anything”, warned 0xngmi.

In August, the project team warned of possible blocks for using copies or imitators of the application. The post drew a heated reaction from the community, and after a few hours it was removed, with co-founder Racer issuing an apology for a ‘silly statement’.